Top 5 post office senior citizen savings scheme and interest rates in 2022

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Over the past few decades, the Indian government has launched several government-backed savings schemes for citizens of India. Many of these schemes have been launched through the Department of Posts. Known collectively as the Post Office Savings Schemes, there are many investment channels that the postal department offers retail investors in India.

Some of the most popular schemes and financial products offered by the Indian Postal Department include the following –

  • National Savings Monthly Income Account(MIS)
  • Public Provident Fund (PPF)
  • Sukanya Samriddhi Account
  • National Savings Certificates (VIIIth Issue) (NSC)
  • Kisan Vikas Patra(KVP)

Apart from these special schemes, the Department of Posts also offers a fixed deposit scheme, known as the National Savings Time Deposit (TD).

What is the National Savings Time Deposit(TD)?

The National Savings Time Deposit (TD) is a kind of term deposit or fixed deposit that is backed by the government of India. It comes with many beneficial features such as a lower minimum deposit limit than many bank FDs, competitive interest rates and the option to avail a loan against your deposit.

Can senior citizens open a Post Office FD?

Yes, senior citizens in India can open a Post Office FD Account. This account is known as a National Savings Time Deposit(TD) Account. In fact, the following persons are eligible to open this account –

  • A single adult, in the case of an individual account
  • Up to 3 adults, in the case of a joint account
  • A guardian, in the case of a minor or of a person of unsound mind
  • A minor who is above 10 years

What are the Post Office FD interest rates for senior citizens?

The interest rates on deposits made under the National Savings Time Deposit scheme are the same for account holders who are below or above 60 years of age. Check out the interest rates on Post Office FDs below.

Period of Deposit

Rate of Interest (for the General Public and for Senior Citizens)

1 year

5.50% per annum

2 years

5.50% per annum

3 years

5.50% per annum

5 years

6.70% per annum

So, if you are a senior citizen who is planning to open a fixed deposit account with the Indian Postal Department, you will earn interest at the rate of 5.50% per annum for deposits with tenures up to 3 years. If you choose a 5-year investment tenure, you can earn higher interest at the rate of 6.70% per annum.

Features of the Post Office FD Scheme

Apart from the interest rates outlined above, Post Office fixed deposits also come with many other defining features and benefits. Let us take a closer look at each of these characteristics below. If you are a senior citizen planning to open a Post Office FD Account, or if you are planning to do so for your senior citizen parent or relative, knowing these features can help you with your investment planning.

  • Minimum and maximum amount
    The minimum amount needed to open an FD account with the Post Office is Rs. 1,000. The deposit amount can be increased in multiples of Rs. 100. However, there is no maximum limit on the amount you can deposit.
  • Number of accounts permitted
    You can make only one deposit per FD account under the National Savings Time Deposit scheme. However, there is no limit on the number of accounts you can open under this scheme.
  • Interest calculation and payout
    The interest is calculated at the applicable rate of interest on a quarterly basis. However, it is only paid out annually. Also, if your annual interest has been paid out into your account, but you have not withdrawn the same, you will not receive any additional interest on that interest amount.

    In other words, interest is only calculated on the deposit amount. You do not earn interest on interest.
  • Investment tenure
    There are four investment tenures that you can choose from. These are listed below.
    • 1 year FD
    • 2 year FD
    • 3 year FD
    • 5 year FD
  • Tax benefits
    5-year fixed deposits qualify for tax benefits2 under section 80C of the Income Tax Act, 1961. The amount you deposit in your account is deductible from your total taxable income, up to Rs. 1.5 lakhs.
  • Extension of your FD account
    Once your FD has matured, you can extend the investment further, by the same period for which you initially opened your fixed deposit account. For instance, if you opened your FD account for a 2-year deposit, you can extend the investment tenure by 2 more years at maturity.
  • Premature closure of your FD account
    Premature withdrawal of your fixed deposit investment is permitted only 6 months after the date of deposit.

Advantages of a Post Office fixed deposit for senior citizens

Senior citizens get to enjoy many financial benefits by including a Post Office fixed deposit account in their investment portfolio. If you are someone above 60 years of age, or if you are planning to open a Post Office FD, here is how it can benefit you.

  • Guaranteed interest
    You can earn guaranteed1 interest on the amount you deposit in your account. This will help you limit or lower the risk in your portfolio, which is very essential after you have retired.
  • Capital preservation
    Once you are past the age of 60, your financial priority should be capital preservation rather than capital appreciation. Post Office FDs help you achieve this goal by keeping your capital intact.
  • Annual income
    The interest earned on your deposit is paid out annually. This can act as a source of annual income for you in your post-retirement life.
  • Tax savings
    You can also save tax by claiming a deduction equal to the amount deposited, up to Rs. 1.5 lakhs. This can help reduce the tax burden.


If you are not yet over the age of 60, but are looking for other investments and financial products to invest a lump sum of money in a risk-free manner, you can even consider saving life insurance plans. The ABSLI Fixed Maturity Plan is one such plan that gives you the dual benefits of insurance and guaranteed1 savings.

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1 Provided all due premiums are paid.
2 Tax benefits are subject to changes in tax laws. Kindly consult your financial advisor for more details.
^ Scenario: Rs. 5,00,000 Single Premium. Male, Age 35, Plan Option A, Policy Term : 10 years
ABSLI Fixed Maturity Plan is a Non- Linked Non- Participating Individual Savings Life Insurance Plan (UIN: 109N135V01)


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